Arch Capital Group Ltd’s fourth-quarter earnings trounced Wall Street expectations as the Bermuda-based insurer came through a testing 2011 with full-year profit of $410.5 million.Despite taking a hit from the Thailand floods, Arch produced fourth-quarter net income of $136.8 million, compared to $227 million in the same period in 2010.After-tax operating income for the October through December period was $126.8 million, or 92 cents per share, easily exceeding the 62 cents per share expectation of analysts polled by Bloomberg.For the full year, net income halved from last year’s $816.7 million, as catastrophes that racked up insured losses for the industry of around $108 billion, took a toll.Arch, led by CEO Dinos Iordanou, wrote more business during the year, with gross premiums written totalling $3.44 billion in 2011, comapred to $3.27 billion in the previous year.And the company also achieved a profitable underwriting record during the quarter, with a combined ratio of 90.1 percent, and for the full year with a combined ratio of 98.5 percent.In the fourth quarter, Arch booked catastrophe losses of $70.8 million, net of reinsurance and reinstatement premiums. This included $60.6 million from the Thailand floods and $5.4 million from an Australian hailstorm during the quarter. The remaining $4.8 million was due to net increases in loss estimates from other catastrophes earlier in 2011.“The severe flooding in Thailand spanned several months between July and December 2011 and has had a significant impact on the Thai economy,” Arch’s statement noted. “Due to the size, duration and complexity of the event, substantial uncertainty remains regarding total covered losses for the insurance industry and the assumptions underlying the Company’s estimates.“Actual losses will depend to a great extent on claims from contingent business interruption coverage.”Arch’s book value per common share was $32.03 at December 31, 2011, a 2.7 percent increase from $31.20 per share at September 30, 2011 and a 6.8 percent increase from $29.99 per share at the end of 2010.The company’s after-tax operating income represented a 12 percent annualised return on average common equity for the 2011 fourth quarter, compared to 12.1 percent for the 2010 fourth quarter, and 7.2 percent for 2011, compared to 12 percent for 2010.